Exxon's Australian unit, partners to invest nearly $200 million in gas project

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Feb 24 (Reuters) - Exxon Mobil's XOM.N Australian unit will invest nearly $200 million in the Kipper 1B gas project, alongside its partners Mitsui 8031.T and Woodside Energy WDS.AX, the U.S. oil major said on the company website on Monday.

The Australian Competition & Consumer Commission has warned that the east coast could face a gas supply shortage from 2027, potentially necessitating imports.

"Projects such as Kipper 1B are vital to help meet the country's energy security needs by bringing new supply online, which will be used exclusively for Australia's domestic market," said Exxon's local unit Esso Australia Resources.

The Kipper 1B project, located in the Gippsland Basin off the south-east coast of Victoria, was jointly approved by Esso Australia Resources, Woodside Energy (Bass Strait), and Mitsui E&P Australia.

Mitsui is the majority shareholder in the Kipper joint venture, holding a 35% stake, while Woodside and Exxon Mobil each own 32.5%.

Esso said that it will continue to invest in its Gippsland operations to support production well into the 2030s.

"The project is expected to expand capacity from the Kipper field, delivering crucial gas supplies to the market ahead of winter 2026," Esso said.

Last month, the competition regulator also highlighted the challenges of building new domestic gas supplies, citing "lengthy regulatory approval processes" and "an uncertain policy environment", among other issues.